Most professionals in the renewable energy industry agree that energy storage is the key to a renewable energy future. Wind turbines and solar panels generate power that is sometimes excessive and other times insufficient. Storage helps to balance the asymmetry between supply and demand. But storage is expensive; in some cases, adding storage to a photovoltaic system more than doubles the total price. As long as net-metering rules are still in effect, using the grid as a virtual storage system is usually desirable, assuming the grid is within reach. That’s fine for residential customers, but there are industrial systems and microgrids that cannot tolerate a loss of power if the grid goes down. In those cases, either storage or backup generators must be used to provide power during the grid outage.

Solar Grid Storage has a unique approach to this: leasing a storage system, similar to a Power Purchase Agreement (PPA) where the installer provides the equipment at no cost to the customer and the customer pays for the electricity that the system generates. In this case, however, Solar Grid Storage is working with PV vendors and installers, not the end customer. I spoke with Tom Leyden, CEO of Solar Grid Storage, to learn more about its equipment and business model.

Equipment

Solar Grid Storage’s PowerFactor 250 works with PV arrays up to 250 kW in size. Unlike many storage systems, this unit is placed outside the building. Depending on climate, appropriate heating and cooling mechanisms are included. Lithium-ion batteries (protected by a proprietary Phase Change Material to prevent fires), provide up to 125 kWh of storage. Although Solar Grid Storage currently uses lithium-ion batteries, its units are intended to be technology-agnostic. The company is always looking at new storage technologies for future products.

The Power Factor 250 is quite large, taking up a 20 foot ISO container and weighing over 15000 pounds (6800 kg). The unit also contains a charge controller, a multimode string inverter, and power factor correction, lowering the overall cost for the customer. It includes a wealth of safety features, including overcharge/overdischarge protection, short-circuit protection, high temperature cutoff, anti-islanding, and more. Customers can monitor its performance locally and on the web.

In the event of a grid failure, the unit will disconnect from the grid and provide power to mission-critical loads. In theory, the system can power critical loads indefinitely - the batteries providing power at night and the PV array providing power, and charging the batteries, during the day. Of course, that assumes that your PV array is big enough to do that (even on cloudy days) and your critical loads are not excessive.

Of course, all of the above could be done with a fuel-powered backup generator. So what’s the advantage of a storage system? For one thing, it comes on instantly, where a backup generator takes time to fire up. Depending on the application, that may or may not be a big issue. The storage system also gives the customer control over peak demand. Even with the the array producing maximum output, it’s possible that the building will need to draw power from the grid under peak demand conditions. Industrial customers pay for demand as well as total energy use, so using battery power rather than tapping into the grid can reduce the customer’s cost. To me, that’s what differentiates this from a normal backup power system.

Business Model

Solar Grid Storage has only been in business for two years, but its founders have extensive experience in the energy industry. So far Solar Grid Storage has four projects in the works: one completed in December of 2012 and three more in progress. The company contracts with PV installers to provide industrial-scale storage systems. Solar Grid Storage provides the equipment to the PV installers free of charge; the company makes its money based on the energy that’s stored and used. Its pricing model is proprietary; Leyden wouldn’t provide any details about it except to say that the company’s private investors pay the upfront costs.

Although the company presently works with commercial scale customers, Solar Grid Storage has its eye on the residential market as well. According to Leyden, distributed storage is growing and companies are trying to find a successful business model. Given the up-front costs of renewable energy and storage technologies, it makes sense for a customer to enter into a Power Purchase Agreement. While it reduces the potential long-term savings of a renewable energy system, it also eliminates the customer’s risk. The provider assumes all the risk with a higher potential reward. Both sides could benefit. Is this the business model that gives renewable energy a boost? Time will tell.